Civil Remedy Notice of Insurer Violations
Login

Filing Number:     786397
Filing Accepted:  10/11/2024
         Print Filing
Complainant
Last/Business Name *  
GRAND COQUINA CONDOMINIUM ASSOCIATION   First Name  
Street Address * 3333 S ATLANTIC AVENUE
City, State Zip * DAYTONA BEACH, FL 32118
Email Address * GRANDCOQUINA3333@GMAIL.COM
Complainant Type: * Insured
Insured
Last/Business Name*   GRAND COQUINA CONDOMINIUM ASSOCIATION   First Name  
Policy # * VETPF04083210 Claim #* 4197914
Attorney
Attorney is Applicable
Last Name* KESSLER First Name * JOSEPH Initial
Street Address* 333 SE 2ND AVE, SUITE 2000
City, State Zip* MIAMI , FL 33131
Email Address * JKESSLER@DKLAWFL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   UNITED SPECIALTY INSURANCE COMPANY
NAIC Company Code 12537
 
Name of individual responsible for violation (if any):* CLAIMS DEPARTMENT AND/OR JESSICA PETREY
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Claim Delay
Unsatisfactory Settlement Offer
Unfair Trade Practice
* Statutory provision(s) which the insurer allegedly violated.
 
624.155(1)(b)(1) Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
626.9541(1)(i)(3)(a) Failing to adopt and implement standards for the proper investigation of claims.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

These actions from the carrier as set forth above violate the following Florida Statutes: 624.155(1)(b)(1), Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests; 626.9541(1)(i)(3)(a), Failing to adopt and implement standards for the proper investigation of claims. The Carrier’s actions set forth above also violated the following policy provisions: Section I- Perils Insured Against, subsection 1, providing coverage for direct loss to property unless the damage was caused solely by an excluded or excepted cause of loss; and the loss payment provision under Section I- Conditions requiring payment of a claim within 90 days.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

October 11th, 2024 Sent Via U.S. Mail & Email ARCH SPECIALTY INSURANCE COMPANY AND UNITED SPECIALTY INSURANCE COMPANY AND CERTAIN UNDERWRITERS AT LLOYD'S, LONDON (Attn: Claims department and/or Jessica Petrey) 12650 Ingenuity Drive Su.200 Orlando, FL 32826 RE: Insured(s) : Grand Coquina Condominium Association (“insured(s)”) Policy # : VETPF04083210 Claim # : 4197914 (Ian) Property Address : 3333 S Atlantic Avenue Daytona Beach FL 32118 Insured(s) Email : GRANDCOQUINA3333@GMAIL.COM Dear Arch Specialty Insurance Company & United Specialty Insurance Company and Underwriters at Lloyd’s London, (“carrier”): Please find enclosed the civil remedy notice filed for the above referenced claim. As discussed in greater detail in the notice, the carrier has not attempted in good faith to settle the insureds’ claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insureds and with due regard for their interests. The carrier is required to properly investigate and adjust claims and cannot place that burden upon the insureds. The carrier was put on notice of the insureds’ claim that occurred on 09/28/2022. After being put on such notice, the carrier initially sent a representative to inspect the property. It is believed the representative initially sent to the property was unqualified or lacked the necessary training to determine the cause of the damages observed during the inspection. It is also believed that the representative initially sent to the property was unqualified or lacked the necessary training to determine the amount of damages sustained as a result of the loss. It is upon information and belief that the carrier’s initial representative observed widespread hurricane damages to the property. The initial representative was unable to rule out hurricane as the cause of the damages observed during the inspection of the property. After the cursory inspection of the property, the carrier advised the insured there was coverage for the loss but the carrier drastically underestimated the amount/scope of damages sustained as a result of the loss. The carrier’s valuation of the damages is severely less than the damages actually sustained as a result of the loss. The carrier did not pay for all direct physical damages sustained as a result of the loss. The carrier failed to properly investigate the claim due to the fact it unvalued the amount/scope of damages sustained as a result of the loss. The carrier failed to provide the full amount of coverage for the physical damages sustained to the property as a result of the loss. The carrier engages in this practice of underpaying/undervaluing claims with such regularity and frequency as to indicate that it is a general business practice of this carrier, in reckless disregard for the rights of the insureds. The carrier consistently relies on under scoped and underpriced estimates to under pay or not pay for covered claims. The carrier’s value of the damages sustained and the amount needed to restore the property are well below the relevant market pricing. Rather than inspecting the property and evaluating the damage in a prudent manner or making any good-faith effort to investigate the claim, the carrier incorrectly undervalued the claim. The carrier’s actions have significantly delayed the resolution of this claim and the insured has been unable to restore the property to it’s pre-loss condition. The carrier has a pattern of drastically lowballing claims and then demanding appraisal when the insured disputes the coverage determination/valuation. These appraisal awards consistently come back drastically above the carrier’s evaluation and coverage of the loss. The insurance carrier undertakes this lowball scheme with such frequency as to be a regular business pattern. The scheme is undertaken as a textbook pattern and practice for underpaying paying claims in order to maximize the carrier’s profits. The carrier hopes the insureds do not have the funds/ability to pay the cost and participate in appraisal so that the carrier can drastically underpay claims. The carrier has failed to adjust the loss with the insured and has failed to pay for all sudden and accidental physical damage to the property. This investigation by the carrier was not done in good faith and is in direct violation of the statutory requirement for carriers to promptly and properly investigate all claims. These actions from the carrier as set forth above violate the following Florida Statutes: 624.155(1)(b)(1), Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests; 626.9541(1)(i)(3)(a), Failing to adopt and implement standards for the proper investigation of claims. The Carrier’s actions set forth above also violated the following policy provisions: Section I- Perils Insured Against, subsection 1, providing coverage for direct loss to property unless the damage was caused solely by an excluded or excepted cause of loss; and the loss payment provision under Section I- Conditions requiring payment of a claim within 90 days. The carrier has mishandled the claim in a classic textbook bad-faith claims handling practice by stonewalling, stalling, and failing to adjust and properly cover the claim by retaining outcome-oriented agents that did not evaluate the loss, coverage, or information objectively. Had the carrier taken the time to properly investigate this claim, reviewed the readily available guidelines, or sent qualified unbiased people out to the property to investigate, the insured would not be in this situation. It is clear that the carrier is not treating the insured with good faith claims conduct; failing to pay a claim clearly owed and acknowledged in writing; not adjusting the claim and evaluating the loss properly, promptly and fairly to provide full and prompt indemnity to the insured; failing to implement proper standards for the adjustment and investigation of claims; not training, supervising or managing adjusters properly so that prompt and full payments are made, but rather placing the company’s interests before the insured’s interests; refusing to cover the claim and pay the full amount owed to the insured despite the fact that the damages are covered under the policy; looking for ways to delay full recovery or any recovery to the insured; and refusing to provide coverage for the insured’s loss in a timely manner. The carrier engages in this practice of attempting to delay, low-ball, deny claims in order to maximize the carrier’s profit margins with such regularity and frequency as to indicate that it is a general business practice of this carrier, in reckless disregard for the rights of the insured. It is clear that the carrier is not treating the insured with good faith claims conduct. All the aforementioned are part of what appears to be an ongoing pattern and practice of behavior of the carrier that it demonstrates a wanton and reckless disregard for the insureds’ rights and a pattern and practice of bad faith claims practices to its insureds across the state of Florida. Therefore, to cure the defects outlined in this Civil Remedy Notice, the carrier must: 1.) Pay the complete covered loss in the amount of $7,000,000.00; 2.) Pay the Insureds’ attorneys’ fees and costs as they have been forced to retain counsel; 3.) Pay the statutory interest on the amount of unpaid damages from the date of loss to the date payment is finally made. A copy of this letter and filed form submitted to the FDFS has been printed out and mailed. Please do not hesitate to contact the undersigned if you have any questions or concerns. Sincerely, Joseph Kessler, Esq. Attorneys at Law
Comments
User Id Date Added Comment
aschultz@cozen.com 12-10-2024 Arch Specialty Insurance Company, United Specialty Insurance Company, and Certain Underwriters at Lloyd’s, London (collectively, “the Market”) are in receipt of a Civil Remedy Notice no. 786397 (“CRN”). The CRN was filed by Joseph Kessler, Esq. on behalf of Complainant Grand Coquina Condominium Association (“Insured” or “Complainant”) on October 11, 2024. This response to the CRN is timely made. The Market subscribes to a commercial property insurance policy no. VETPF04083210 providing insurance coverage to the Insured for the policy period of December 31, 2021 to December 31, 2022 (“Policy”). The Policy insures a condominium property located at 3333 S. Atlantic Ave., Daytona Beach Shores, FL (“Property”). On or about September 29, 2022, the Market received notice of claimed loss at the Property due to Hurricane Ian. The Market retained Sedgwick Delegated Authority to serve as its third party claims administrator (the “TPA”). The TPA engaged Loyacona Fountain Group (“Loyacona”) as the Market’s building consultant and Thornton Tomasetti (“TT”) as its engineering consultant. The TPA further retained Sedgwick Claim Management as the independent adjuster (the “IA”), which conducted an initial inspection of the Property on October 13, 2022. On October 16, 2022, the TPA wrote to the Insured advising that the Market was reserving all of its rights pursuant to the Policy and applicable law, and requested needed information. On October 19, 2022, Insured engaged John Chartrand of Strategic Claim Consultants (“SCC”) as its public adjuster. The IA conducted a reinspection of the Property on November 3-4, 2022 along with Loyacona and TT. Following this inspection, on January 6, 2023, the Market issued an advance payment to the Insured. On January 19, 2023, TT finalized its engineering report. TT opined that the roofing systems showed signs of improper installation and “long-term product performance” issues. TT also found old, soiled scratches that were not the result of wind. However, there were displaced metal flashing and gutters that appeared recent. TT found only minor wind damage to the exterior stucco. In addition to the seawall collapse, there was soil erosion around the area. There was also cracking and partial collapse of the concrete around the pool area. Many of the windows and doors were deteriorated and showed long-term signs of water intrusion. The TT report attributed minor damage to wind from the event. It also attributed damage to the property from flooding and/or wave action. Further, the TT report indicated that there was no event-related damage to the windows and doors within the subject Property. Water intrusion into the units, including the clubroom, during the event was attributed to water intrusion through pre-existing openings in the fenestrations. On January 20, 2023, the IA, TT, and Loyacona conducted another inspection of the Property to assess additional damage caused by water underneath the lower roof claimed by Mr. Chartrand. On February 27, 2023, Loyacona prepared an estimate of the loss based on its inspections and TT’s findings. On March 21, 2023, SCC prepared a “preliminary” estimate of the loss. SCC submitted the estimate on March 21, 2023. However, no documentation was submitted to support this estimate. On March 28, 2023, the TPA wrote to the Insured to explain the Market’s coverage position. The TPA explained that the Policy does not provide coverage for any damages caused by flood or wave action, wear and tear, faulty maintenance, or improper workmanship. Sedgwick additionally explained that the Policy’s “interior water damage” limitation applied to the loss and advised the Insured of the wind-driven rain sublimit. The TPA concluded that the total loss failed to exceed the Named Storm Deductible. The TPA invited the Insured to submit a signed, sworn proof of loss (within 60 days) along with supporting documentation should there be a disagreement with the coverage determination. On May 25, 2023, the TPA received an invoice from the Insured’s mitigation contractor, SouthernCat, without supporting documentation. The TPA was unable to complete its review of the invoice as it was unable to obtain supporting documentation from SouthernCat. On August 22, 2023, Trillas Consulting Engineers (“Trillas”) prepared an engineering report on behalf of the Insured. According to the report, Trillas inspected the Property on July 5, 7, 10, and 12, 2023, nearly ten months after the date of loss. Trillas found cracks throughout the buildings’ exterior. Trillas additionally found abrasions, uplift, and heightened moisture readings on the roof. Trillas further found moisture intrusion around the ceilings and fenestrations of the interior units on every floor. Trillas claimed that 573 of the 984 fenestrations on the Property were damaged during Hurricane Ian, and also a subsequent storm, Hurricane Nicole. Trillas noted that temporary repairs had been made to the roof and that repairs were underway on the exterior stucco. The Trillas report concluded that the winds from Hurricanes Ian and Nicole rendered substantial and irreversible damage to the buildings and weakened portions of the building such that the building envelope was measurably less effective against future storms. The report did not separate which damages were allegedly attributable to Hurricane Ian versus Hurricane Nicole. The Market carefully reviewed the Trillas report. On September 21, 2023, SCC prepared an updated estimate. The Market understands this total includes both damages caused by Hurricane Ian for which it submitted the original claim, and its separate claim for damages caused by Hurricane Nicole, though totals for each claim were not delineated in the estimate. Another reinspection of the Property took place on January 15-17, 2024 with TT, Trillas, and Mr. Chartrand. Attempts were made to schedule the reinspection sooner, but these were the earliest dates of availability for all parties. At the inspection, 95% of the interior units were inspected. On March 7, 2024, TT prepared a supplemental report which addressed damages allegedly caused by both Hurricane Ian and Hurricane Nicole. TT explained that its previous opinions detailed in the January 19, 2023 report remained unchanged. The subsequent TT report noted additional items not specifically addressed in the previous report that were not attributed to the losses. TT further opined on the conclusions in the Trillas report and explained the reasons for its disagreement with those conclusions. On June 21, 2024, the TPA wrote to the Insured to affirm the Market’s coverage position. In the letter, the TPA renewed the Market’s request for a signed, sworn proof of loss as it remained outstanding. The TPA also requested additional needed documents. On July 11, 2024, SCC demanded appraisal on behalf of the Insured. On August 16, 2024, the TPA declined to proceed with appraisal in accordance with the Policy’s mutual appraisal provision. The TPA also renewed its document requests from the June 21, 2024 letter, as the requested documentation had not been received. On September 25, 2024, the Insured served the Market with a Property Insurance Notice of Intent to Initiate Litigation (“NOI”) with a pre-suit settlement demand. The Market timely responded to the NOI on October 8, 2024 through its litigation counsel. In response to the NOI, the Market noted that the NOI was premature due to the Insured’s failure to respond to the TPA’s June 21, 2024 document requests. The NOI response renewed its request for these documents. Notwithstanding, the Market invoked its right to a pre-suit mediation. The mediation is scheduled to go forward on December 16, 2024. On October 11, 2024, Complainant filed the CRN. The CRN demands $7,000,000, plus attorneys’ fees, costs, and interest (despite a significantly lower pre-suit settlement demand contained in the NOI 16 days earlier). The CRN alleges a failure to attempt in good faith to settle claims and a failure to adopt and implement standards for the proper investigation of claims. These allegations are denied. The CRN is composed of generic, conclusory, and unsupported statements and contains no factual discussion of the circumstances of this loss or what has actually transpired during the adjustment. For example, the CRN states that the “representative” who inspected the Property was “unqualified,” “lacked the necessary training,” and that “upon information and belief” the representative “observed widespread hurricane damage to the property.” The CRN contains no factual support for these allegations, which are also denied. The CRN also includes wild accusations of a pattern and practice scheme that at its core alleges that the Market routinely demands appraisal to underpay claims. Complainant misrepresents the core fact – that Complainant, and not the Market, demanded appraisal. The rest fails as a consequence of this misrepresentation and is illustrative of all of the conclusory, unsupported allegations contained in the CRN. Like the remainder of the boilerplate allegations in the CRN, Complainant sets forth no support, specifics, or examples of the alleged conduct, and all of these assertions are denied. The Market maintains that is has properly handled the adjustment of this claim. It has retained trained, experienced, and competent professionals who have conducted multiple inspections of the Property. The Market has thoroughly explained its coverage position to Complainant and paid the amounts owed. In a showing of good faith, the Market issued a substantial advance payment to Complainant before the adjustment was even complete. It is Complainant who has impeded the adjustment of the loss, as Complainant has failed to respond to the document requests repeatedly made to it beginning in June 2024. Further, the significant increase of Complainant’s demand over the course of a few weeks from September 25, 2024 to October 11, 2024, demonstrates the arbitrary nature of Complainant’s own evaluation of its claim. The Market notes that Fla. St. § 624.155(5)(b)(1) requires Complainant and its representatives to act in good faith in providing information regarding the claim, making demands, setting deadlines, and attempting to settle the claim. In short, the Market denies all allegations of bad faith conduct in the CRN, or any violation of applicable law. However, the Market is prepared to participate in mediation in good faith and with the goal of reaching a resolution with Complainant. While this response is meant to be comprehensive, this response is based upon the information provided in the CRN and the information it has collected to date. If the Complainant feels additional facts are relevant or material facts have been misunderstood, please inform us immediately. Please note that this response is not necessarily exhaustive and does not preclude future assertions of any other valid reason for seeking rejection and return of the CRN. Also, this letter or any act or failure to act should not be construed as a waiver of any rights or defenses available by contract or at law as all such rights and defenses are hereby specifically reserved. Should the Department require further evidence or clarification in the context of the CRN and this response, please do not hesitate to contact the undersigned. Sincerely, John David Dickenson, Esq. Alexandra Schultz, Esq. Cozen O’Connor (561) 750-3850 jdickenson@cozen.com aschultz@cozen.com
Acknowledgement
* The submitter hereby states that this notice is given in order to perfect the rights of the person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.

Before submitting a Notice using this system, please verify that all text has been entered correctly and completely. Once the Notice has been submitted, the text cannot be changed or deleted.




DFS-10-363
Rev. 10/14/2008